Decisions. Decisions. Decisions. For a restoration business owner this is what your day to day life consists of. Within these decisions include the hard decisions that you probably rather not make, but you know are necessary to increase the productivity, profitability, and cash flow of your business. Most people don’t want to decide what or who to cut, but these are the hard decisions that are necessary to keep operations running smoothly.
Here are the top 3 decisions restoration business owner don't want to make:
- Ruthlessly Cut Expenses. This is a decision that must be made, especially if you are looking to increase the cash flow of your restoration business. Go back through and determine what you are overlooking. You will be surprised what you can cut and negotiate. Ask yourself, ‘Do I really need that big warehouse?’ ‘Can I negotiate my phone plan, internet service, or other utilities?’
- Streamlining your product offering. Cut the services that are not performing. As a rule, companies with excellent cash flow do an excellent job of providing one product or service very well rather than doing an average job of providing 10 products or services. If an item or service is not selling consistently it is harming your cash flow. Often times 80% of your profits are coming from 20% of your products. So the hard decision is determining which of your products or services are generating 80% of your profits and cutting the ones that aren’t performing. Minimize the money and time you’re investing on those that aren’t selling. Inventory that is piling up is not cash, so sell off dead inventory to put that money back into your pocket.
- Outsourcing. Outsource what you can. Most positions can be multi-purpose and often are. Make sure the positions you have are creating a true return on your investment (ROI) and they are actually bringing in money. Check out different outsourcing options. You’d be surprised at how affordable it can be. Therefore, you will be cutting more costs and increasing your cash flow.
So as you know your job as a restoration business owner is to make the hard decisions, the ones no one else wants to make. However, making these decisions will help your business in the long run by creating more cash flow and creating a more productive work environment.